Funding cuts under new health care law may cause problems

A reality of health care is some people are too poor to pay for it.Now, the government won’t either.

Wes Wolfe / Staff Writer

A reality of health care is some people are too poor to pay for it.

Now, the government won’t either.

In the past, the federal government helped cover unpaid bills at hospitals for people who lacked health insurance.

But, as the Affordable Care Act – commonly known as Obamacare – was drafted, it was assumed the states would expand Medicaid, eliminating the need for such subsidies, so they were set to be eliminated.

However, the U.S. Supreme Court, in ruling that the ACA was constitutional, also ruled states could opt out of Medicaid expansion.

Subsequently, 26 states – including North Carolina – took that path. That put hospitals and health systems in those states in a bind.

Lenoir Memorial Hospital is anticipated to lose $1 million to cover expenses.

“There’s very little that we can do that hasn’t already been done, because we have a very efficient cost structure, and we have to keep our staffing levels appropriate for our patient volume,” LMH spokeswoman Barbara LaRoque said.

LaRoque added that the hospital averages more than $30 million in uncompensated care annually.

Other states are having issues with funding as well. In Virginia, subsidies to the VCU Medical Center and the University of Virginia Medical Center could drop $500 million.

“It’s going to look like Calcutta. It’s going to be bad,” said VCU Health System CEO Sheldon Retchin to the Richmond Times-Dispatch on Tuesday.

In state, the situation could result in political shifts in Raleigh. While Republicans who control the General Assembly have been close to united in opposition to the new health care law, influence brought to bear by the health care community may be making changes.

Indeed, Gov. Pat McCrory’s Medicaid Reform Advisory Group – of which state Sen. Louis Pate, R-Wayne, is a member – hasn’t ruled out anything yet, including Medicaid expansion.

While GOP legislators may be uncomfortable doing a 180-degree turn on the health care policy, there are other methods that could be used.

According to Don Taylor, associate professor of public policy at Duke University, there are at least four options available.

One is expanding Medicaid under the ACA using a “private expansion” model based on what Arkansas conducted.

Another is enrolling people in a “stop-loss catastrophic hospital insurance payment mechanism,” in which the state government would be on the hook for anything more than $10,000 in costs annually for a person and $25,000 for a family.

“I acknowledge that being uninsured is not only a financial problem and that there are human consequences. This is not the same as providing the 440,000 residual uninsured with health insurance, which would be expected to increase their use of care substantially,” Taylor wrote Dec. 12, six days after the Medicaid Reform Advisory Group’s first meeting.

He continued, “And it could correctly be said that this policy will most directly benefit hospitals who are now providing such care but not getting reimbursed. However, if our state expands Medicaid and sets up a vigorous health care exchange to market those policies, we will have done a great deal to address the issue of uninsurance.”

Wes Wolfe can be reached at 252-559-1075 and Wes.Wolfe@Kinston.com. Follow him on Twitter @WolfeReports.

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